seller's breach does not have the legal duty to take steps blocking a sale of the property to protect the right of specific performance" (App. Specific performance is allowed in real estate contracts because each parcel of land is unique and monetary damages are not adequate. Most contracts specify the remedy for non-performance by both parties. Yes, specific performance forces a person to do something specific -ie to honor the contract. Buyer must specifically perform. The buyer has a lot more to lose. . In order to get specific performance, you have to show that you have no adequate legal remedy. A property seller might sue his buyer for specific performance to force that buyer to purchase the property. The seller may alternatively bring an action for specific performance (described below). Finally, a seller may sue for breach of contract damages. In most real estate contracts, a seller's sole legal remedy against a buyer who fails to . Specific Performance asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. Pursuing specific performance, meaning the . If the seller backs out of the purchase contract without legal justification, the buyer can sue the seller. Ash Park, LLC, owned a vacant parcel of real estate in . The buyer is allowed to sue for specific performance if the seller refuses to move forward with her obligations under the agreed upon contract. A party seeking the remedy of specific performance must prove and plead 1) compliance with the contract including tender . This is a costly and time-consuming process. 4). In Berggren vs. Hill, (1st District, May 18, 2010), 401 Ill.App.3d 475, 928 N.E.2d 1225, a Seller brought suit for Specific Performance of a contract for the sale of a condominium unit for $1,650,000. This option is rarely used and even more rarely granted. A buyer can sue the seller to force the seller to perform under the contract. However, the amount that a buyer can sue for depends on individual state laws. Posted on Feb 5, 2013 The answer on specific performance will depend on the language of the purchase agreement. In general, a seller has three different options when a buy breaches a real estate contract. By: dmc-admin June 14, 2010 1:00 am. If a buyer breaches a contract for sale of real estate, a seller generally has three options: Keep the earnest money deposit. The Wisconsin Supreme Court declined on June 3 to limit the remedy to buyers only. Specific performance is the name of a remedy for breach of contract. As the seller, you can keep the buyer's earnest money. Typically, a buyer must sue the seller for specific performance. Terminating the contract and requesting that their deposit be returned and that reasonable expenses be covered. What does it mean to sue for specific performance? However, specific performance is usually more effectively used by a wronged buyer than by a wronged seller . Sue for monetary damages. The seller has to ask essentially if they would get a better sales price by going back to market. When buyers cancel their real estate deals sellers may sue for breach of contract and monetary damages. Before we look at specific performance cases, it's worth reviewing how real estate contracts - also known as "purchase contracts" or "sale agreements" - work. Typically it's buyers who sue sellers for specific performance, not the other way around. They compensate the injured party for the financial consequences of the sale falling through. Almost all purchase contracts have a section that deals with the buyer's remedy if the seller fails to perform. Specific Performance is an equitable remedy that allows a court to order a breaching party to complete his or her side of the real estate contract. Wiki User. The buyer must tender the purchase price in order for specific performance to be granted. 3 Pay your filing fee. But, that isn't the limit of the buyer's liability. Specific performance is a remedy usually available to buyers, not sellers. He refuses to deposit his deed and close the sale. When can seller sue for specific performance? If Seller fails to comply with this contract for any other reason, Seller will be in default and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby releasing both parties from this contract. Specific performance is just what it says. Thread starter Jason3743; Start date May 21, 2013; J. Jason3743. This is a proper remedy when money damages alone are not sufficient to give plaintiff the benefit of the bargain. Most of the time, it's not worth it. The usual remedy is money damages. Subsequently, question is, can a seller sue a buyer for specific performance Texas? Specific performance is a remedy whereby the buyer or, on rare occasions, the seller can sue the other party to the contract to force them to comply with the contract's terms. . The earnest money deposit is the amount of money that a buyer puts down up front in a contract for sale of real estate. In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement. The Case of Our Savior Lutheran Church v. Tom Jones Enterprises, Inc. Here's an example of specific performance litigation in action here in Florida. As a professional, you must take each seller case-by-case and do what you feel is the best, both ethically and professionally. to prove a claim for specific performance, a plaintiff must prove the existence of the contract by clear, definite, and certain evidence. When You Can Sue. Real estate contracts; specific performance and earnest money liquidated damages. Luckily, if a home seller reneges on an agreement to sell their home, the harmed buyer has several remedies at their disposal, including: Seeking monetary compensation for breach of contract. He refuses to deposit his deed and close the sale. This most often arises in real estate deals because the court considers every piece of land to be unique, and monetary damages are not adequate to remedy the situation if the deal falls through on one side. Legal actions take time and are expensive. If a party to the contract of sale wrongfully refuses to complete the transaction, the other party may have a legal right to either sue for money damages, or in some instances, to sue for specific performance. In holding same, the Court of Appeals failed to recognize that specific performance is an equitable remedy and that the common law places a specific duty upon the buyer to protect his rights. Damages often claimed as a result of breach of real estate contracts include compensatory damages, consequential damages, incidental damages, punitive damages and liquidated damages. . Second, a seller may to sue for specific performance, requiring the buyer to close on the property. suing seller for specific performance It's the Law: Liquidated damages clause may be unenforceable Because real estate is generally considered to be unique, the remedy of specific performance is presumed to be available even though the alternative . The buyer may pursue specific performance if the seller is unwilling to carry out his or her obligations under the contract. In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement. The goal of a lawsuit for specific performance is . If you are suing for specific performance of something other than real estate, then file in the court where the defendant lives or does business. 6 the typical specific performance Specific performance is available as a remedy when the following exist: A binding and enforceable contract Reasonable and certain terms You're also not going to get an order for specific performance inside of that . Check the website for your local court to see if there are separate law and chancery (equity) courts or of they have been merged. Specific Performance Role. Specific performance is the name of a remedy for breach of contract. You can't sue for breach of contract unless your contract was valid. Sue for monetary damages Courts have the authority to award specific performance in cases where money damages are inadequate remedy for the damages that the plaintiff has incurred. Some have referred to it as "legal blackmail." Once the buyer files the lis pendens, the seller will no longer be able to covey the property to another due to the cloud on title. A suit for specific performance is like an court injunction, ordering one party to complete the performance promised in a contract. What is suing for specific performance? In May 1978, a Lutheran church here in . admin March 6, 2018. You can sue the sellers for specific performance, but you can't force the bank to maintain its agreement to a short sale. Joined May 21, 2013 Messages 3 . If the seller backs out the buyer loses that property forever. Buyer's Suing for Specific Performance Specific performance is allowed in real estate contracts because each parcel of land is unique and monetary damages are not adequate. " Id., at 1279-80, n. 3 (Emphasis added . 2. Unless the . The seller may alternatively bring an action for specific performance (described below). This remedy is available to both sides. 2012-11-06 16:44:47. Filing lis pendens will also do nothing to remove an existing IRS lien, although per its traditional practices the IRS won't be foreclosing. Before escrow closes, the seller realizes he's made a bad deal. You can't sue for breach of contract unless your contract was valid. To seek specific performance, the contract terms must be sufficiently definite: the names of the seller and buyer, the purchase price, the date and time of delivery, and a description of the property. There will probably be a filing fee. To seek specific performance, the contract terms must be sufficiently definite: the names of the seller and buyer, the purchase price, the date and time of delivery, and a description of the property. Because most contract issues can be resolved by money damages . Before escrow closes, the seller realizes he's made a bad deal. If the buyer really wants to purchase the house, the buyer can sue the seller for specific performance plus damages and costs of the lawsuit. in these cases, specific performance is warranted when the seller establishes that he or she is ready, willing, and able to convey good and marketable title, free and clear of encumbrances or material defects, and there is no indication that the contract was inequitable or that a change in the circumstances rendered specific enforcement of the In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement. Suing Seller for Specific Performance. We think of the seller suing a buyer to complete a real property purchase in real estate contracts. Can the Buyer in Real Estate Transactions Sue for Specific Performance? Seller's Remedy of Specific Performance. More specifically, the court would order the seller to complete the transaction according to the terms of the contract, rather than to compensate you monetarily for the breach. Specific performance means the buyer can sue to force a sale. However, the amount you can sue for depends on the law in your individual state. This is known as an action for specific performance. Central to the Court's reasoning that the California Association of Realtors form contract cannot be construed as an option contract was its observation: " When a purchase and sale agreement contains a liquidated damages provision, the seller may nonetheless elect to sue for specific performance. Here is why a lis pendens is important in specific performance claims. If the buyer is asking for specific performance, he or she usually wants the court to order the seller to be forced to complete the sale. Be c. Bring an action for specific performance. About Us This document becomes legally binding when the seller accepts the buyer's offer and they agree on all the other conditions. Sue for breach of contract, or. The buyer must tender the purchase price in order for specific performance to be granted. A buyer has the option under some circumstances to sue as well. Specific Performance asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. Analyze whether the contract is valid. The usual remedy is money damages. Sue for specific performance. That typically has two choices: liquidated damages or specific performance. If you have complied with all of your requirements under the contract and there are no contingencies that the other party can point to, you will have an argument that specific performance should be granted. Another option is to sue for monetary damages for breach of contract. suing seller for specific performance It's the Law: Liquidated damages clause may be unenforceable Because real estate is generally considered to be unique, the remedy of specific performance is presumed to be available even though the alternative . Liquidated damages means the buyer gets the EM back. You can also sue for specific performance - in other words, force the buyer to settle. The buyer has different legal remedies depending on his objective. When a seller breaches a real estate contract and that action results in damages to the buyer, suing the seller for breach of contract is a viable option. Specific performance remains a viable remedy for sellers, as well as buyers, when the other party breaches a contract for real property. It is usually a very small percentage (2-5% . You're thrilled, because you think it's really worth $450,000. Typically, we see specific performance cases where the seller backs . For sellers, suing for specific performance can mean tying up the buyer's funds which can be pressure on a business to rethink its earlier position. A seller of real property may file a lawsuit against a defaulting buyer for specific performance of the sales contract. The terms of the form agreement required initial earnest . There are times you can come across sellers who don't comply with the established contract, and you may think about suing them for specific performance. In plain English, this means you're asking a court to order the seller to sell the home to you as originally planned. Once the contract is live, both the seller and the buyer . I am suing a seller for specific performance because he cannot convey title because he has liens on the property that are in excess of the purchase price. When a seller is selling something that is unique and could not be replaced by purchasing another, the law provides buyers with a remedy in addition to a claim for money damages. You sue. Actions for Specific Performance or Money Damages for Breach of Real Estate Contract. Because most contract issues can be resolved by money damages . 4 the plaintiff then must prove that it complied with the conditions of the contract, 5 and that it was ready, willing, and able to perform its obligations under the contract. The last thing you want is specific performance of a contract to sell you property that has more money in liens against it than . Study now. Specific performance is a remedy in contract law that is most often applied in real estate litigation and disputes where a court issues an order requiring a party to perform a specific act, and to specifically perform according to the terms of a contract. In assessing the validity of the vendor's termination of the contract, the Court of Appeal discussed the legal significance of commencing proceedings for specific performance. Under Illinois laws, a contract is assumed to have been formed when three conditions are met: 1) One party makes . If you need assistance with suing a seller for breach of contract, you should let DoNotPay help you take the breaching party to small claims court and seek justice there. " Specific performance " may also be a legal remedy for a property seller if a buyer backs out of the deal. Suing a Home Seller for Breach of Contract With DoNotPay's Help. Sue for specific performance: There is a legal right for the seller to file suit against the buyer, asking the Judge to order that the buyer actually go to closing. Say you buy a house for $400,000. It is standard to plead alternative relief-ie money damages-should the court not allow specific performance. The relief actually obtained by the seller in this kind of lawsuit is the recovery of money because the court can only enter a judgment requiring the payment of the purchase price . If the seller can show they acted in good faith and you cannot prove you were financially affected, you may only be entitled to your . Retain the initial earnest money payment and terminate the contract. See answer (1) Best Answer. You sue. Specific performance is an equitable remedy in Texas where a party (almost always the buyer) asks a court to force the seller to transfer the property according to the terms of an earnest money contract. When a buyer backs out the seller can always find another buyer. Say you buy a house for $400,000. We received the Louis M. Brown Award for Legal Access in 2020 and can handle various administrative matters with ease. Specific Performance asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. If a seller is actually breaching a contract and you can prove you have been financially damaged, you could sue. So because he cant pay them, he wants to cancel contract. However, specific performance is usually more effectively used by a wronged buyer than by a wronged seller, the reason being that a breaching buyer will simply claim that he cannot financially satisfy a judicial decree requiring him to purchase the subject . The buyer, for instance, could sue the seller for all of the costs put into the transaction, including a return of the earnest money deposit (with interest), as well as the costs resulting from any missed time and opportunities. But without legal representation, if a seller does not close following the sales contract, then most contract forms state that the buyer can sue the seller for "specific performance", which is legalese for asking a court to require that the seller sell the property to the buyer at the price and terms stated in the contract. For the seller, seeking specific performance is a crapshoot. In summary, the court held that a vendor who elects to sue for specific performance is not precluded . Analyze whether the contract is valid. Right to terminate after election to sue for specific performance. For the buyer, there is a strategic advantage in suing for specific performance. You're thrilled, because you think it's really worth $450,000. A suit for specific performance is like an court injunction, ordering one party to complete the performance promised in a contract. As a seller, your legal remedy is clear: the difference in price agreed and price ultimately obtained. Copy. That remedy is specific performance.